S&P assigns NCR ATMCo B+

S&P said it assigned B+ ratings to NCR ATMCo LLC, its senior secured revolver, and term loans. The recovery rating is 3. The outlook is stable.

The company will retain the automated teller machine business of NCR Corp. after NCR Atleos is spun off.

“We expect ATM transaction volume and cash use to face growth challenges because of the proliferation of digital payments like mobile apps that enable consumers to transact payments using their bank accounts. Trends like ecommerce have been growing card and mobile wallet usage, and financial inclusion initiatives to serve unbanked and underbanked customers will also likely contribute to digital payments and card usage growth,” S&P said in a press release.

The outlook reflects an expectation for 3%-5% revenue growth, improving profitability, and normalized annual FOCF of about $125 million over the next 12 months (post-close) as it executes its ATM-as-a-service strategy and transaction volume recovers from pandemic-related disruptions. “This should support deleveraging to about 4x within 12 months of close, down from about 4.4x pro forma basis,” the agency said.

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